What is Indo-Pacific Economic Framework (IPEF)? About Indo-Pacific Economic Framework (IPEF)

Why in News ?

India, the US and 12 other countries are likely to ink an agreement to help them meet their climate objectives through collaborative financing without imposing barriers.

The proposed Clean Economy Agreement under the Indo-Pacific Economic Framework (IPEF) aims to help the member countries meet their climate objectives by improving market conditions.

About IPEF :

The Indo-Pacific Economic Framework for Prosperity (IPEF) is an initiative launched by the United States in May 2022 to promote economic cooperation among countries in the Indo-Pacific region.

Members:

IPEF currently has 14 member countries:

• Australia
• Brunei Darussalam
• Fiji
• India (opted out of some pillars)
• Indonesia
• Japan
• Republic of Korea
• Malaysia
• New Zealand
• Philippines
• Singapore
• Thailand
• Vietnam
• United States

• Membership is open to other countries in the Indo-Pacific region.

Objectives:

IPEF aims to achieve several objectives for the member economies:

• Advance Resilience: Strengthening economies against disruptions like natural disasters or pandemics.
• Promote Sustainability: Encouraging environmentally friendly practices and clean energy development.
• Drive Inclusive Growth: Creating economic opportunities that benefit all segments of society.
• Enhance Economic Fairness: Ensuring fair trade practices and reducing corruption.
• Boost Competitiveness: Strengthening the competitiveness of member economies in the global market.

Structure:

IPEF is structured around four central pillars, with each member country choosing which pillars to participate in:

• Trade: Negotiating agreements to lower tariffs, streamline customs procedures, and promote digital trade. (India has not joined this pillar)
• Supply Chains: Cooperating to ensure the smooth flow of goods and materials within the region.
• Clean Economy: Collaborating on clean energy technologies, decarbonization efforts, and climate-resilient infrastructure.
• Fair Economy: Promoting good regulatory practices, fair competition, and strong labor standards.

Benefits:

• Increased trade and investment flows within the Indo-Pacific region.
• More resilient and sustainable economic growth for member countries.
• Enhanced cooperation on critical issues like climate change.
• A stronger and more competitive Indo-Pacific region.

Challenges:

• Negotiating trade agreements can be complex and time-consuming.
• There are varying levels of economic development among member countries.
• Balancing national interests with regional cooperation goals can be challenging.

Overall, IPEF is a significant initiative with the potential to shape economic relations in the Indo-Pacific region. Its success will depend on the commitment of member countries to work together and address the existing challenges.